Prakash Singh/Agence France-Presse - Getty ImagesA panel at the World Economic Forum on India during the World Economic Forum summit in Gurgaon, Haryana, on Nov. 7.GURGAON â€" To understand the pall that slowing growth and seemingly paralyzed policy making has cast over business sentiment in India look no further than a panel held at an economic conference here this week: ‘‘Rebooting India.''
By contrast, two years earlier, at the same conference hosted by the World Economic Forum, the high and mighty of Indian business and government were discussing happier topics like ‘‘India: What Kind of Super power Will It Be?''
Corporate India and the country's policy makers once strode confidently across the world stage, projecting a confidence that some critics said bordered on swagger. But those days are long gone. Now, many executives and investors have turned dour and critical, mostly about the country's beleaguered public officials. And policy makers for their part are increasingly defensive and have, in turn, been criticizing the media and investors for being too negative.
The change in mood was on stark display at the Economic Forum's annual three-day conference, this year held in Gurgaon, a booming city south of New Delhi. The event, where attendance was down about 10 percent from a year ago, has long served as a place for corporate titans and top policy makers to glad- hand while giving a nod to India's problems that still need attention like weak infrastructure or inefficient judicial system.
This year t he camaraderie was visibly absent, particularly at the panel on rebooting India. Executives and government officials got into testy arguments about how economic growth had slowed from a roaring pace of nearly 10 percent before and after the financial crisis in 2008, to a projected 5.5 percent to 6 percent this year.
‘‘We are in a situation where inflation is high, there is no growth, growth has come down, we keep revising growth down and the fiscal deficit is high,'' N. Chandrasekaran, the chief executive of Tata Consultancy Services, India's largest technology outsourcing company, said on the panel. ‘‘None of the things we are doing is working.''
Not so, retorted the country's newly minted law minister, Ashwani Kumar, who argued that the country was on the comeback trail and would soon prove its detractors wrong. ‘‘Through a series of bold policy initiatives, transparency in government and regulatory reforms, we will be able to get back to 8 percent growth by 2015-16,'' Mr. Kumar told the audience.
On the same panel, Mr. Kumar also fielded skeptical questions and sarcastic comments from Rahul Bajaj, whose family runs one of India's largest motorcycle producers named after the family. He criticized the government for impeding investments. And Mr. Kumar also received flak from the moderator, Shekhar Gupta, the editor of the influential Indian Express newspaper, who chided the governing Congress Party for being too hostile to foreign investors and companies.
Mr. Kumar brooked none of that criticism, saying it was the result of ‘‘negative'' media coverage. He pointed out that officials recently pushed through several changes like cuts in fuel subsidies and relaxing restrictions on foreign retailers and airlines.
But his response was a tacit admission that the government has only belatedly awoken to India's economic problems. The changes came after years of deliberation and were widely seen as an effort to forestall a downgrade of the country's debt to junk status by credit ratings agencies. Moreover, a number of other more pressing proposals including laws to modernize the insurance sector, land transactions, taxes and other areas, remain stalled in political inertia and opposition by various interest groups.
Some executives said they give the government credit for trying to push for change, especially since the current coalition of political parties in power in New Delhi does not have a majority in Parliament. But they said officials have yet to prove that they can implement their agenda, such as allowing foreign supermarkets to set up shop in India, a decision that New Delhi has left up to individual state governments.
‘‘We have to wait and see how these are taken forward,'' S. Gopalakrishnan, the executive co-chairman of the outsourcing firm Infosys, said in an interview. ‘‘The principles are announc ed, but the implementation is left in many cases to the states.''
Several executives said delays have cost India investment, especially from overseas, as many companies have chosen to focus their efforts on other countries that have better infrastructure and are easier to do business in. Anil Gupta, a management professor at the University of Maryland, said foreign direct investment as a proportion of India's gross domestic product had fallen by more than half in the last five years, to 1.6 percent, and was now much lower than in countries like China and Indonesia.
Vasant M. Prabhu, vice chairman and chief financial officer of Starwood Hotels, said while most companies he knew about were not giving up on India, many were investing elsewhere for now.
‘‘Companies have alternatives and they are not going to just sit there,'' he said. ‘‘They are going to where they can get things done. That's where India loses out.''
Still, at least one Indian executive, Vineet Nayar, said he was pleased India had slowed down because that was turning public attention to the economy, which in recent years many Indians assumed was on auto-pilot and did not require any major changes. Now, he said policy makers and opposition lawmakers would be forced to debate and outline new economic proposals ahead of national elections scheduled for 2014 because voters are increasingly anxious about the pace of job creation and high inflation.
‘‘What this is doing is it is putting the economic agenda center stage,'' Mr. Nayar, who is vice chairman and chief executive of HCL Technologies, said in an interview, adding later: ‘‘We have to go through this pain to get the large gain we are expecting.''
Still, the conference was not entirely downbeat. On Wednesday night, the government of Haryana state, home to Gurgaon, treated those attending the forum to a musical show featuring Bollywood music and Cirque du Soleil-style acrobatics at a flamboyant entertainment venue called Kingdom of Dreams.
